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Purchasing insurance for a cannabusiness can feel like a daunting task, but it does not have to be one.

In addition to grappling with many of the same issues and questions that any business confronts when seeking insurance, a cannabusiness encounters certain additional, unique challenges due to the industry in which it operates. That is no reason to panic, however. And, it is certainly no reason to avoid purchasing insurance.

There are a number of steps that a cannabusiness – or, really, any business – can take to maximize the likelihood that the insurance-procurement process will be smooth and successful. In particular, when purchasing insurance, a cannabusiness should consider the following 10 steps: Continue Reading Ten important steps a cannabusiness should consider when purchasing insurance

In the world of insurance coverage litigation, insurance companies like to accuse policyholders of attempting to expand coverage terms, or limit the scope of exclusions, beyond the language’s plain meaning. “The policy means what it says,” is a common refrain insurers use to justify coverage denials. However, a recent decision by the federal Fourth Circuit Court of Appeals, Capital City Real Estate, LLC v. Certain Underwriters at Lloyd’s, London, No. 14-1239 (June 10, 2015), demonstrates that insurers are at least as likely as policyholders to try to make policy language say what they wish it said, rather than what it actually says. The court does an admirable job of applying the straightforward language of an additional insured endorsement that has given some other courts trouble, and demonstrates that oftentimes the best approach is simply to hold insurers to the plain meaning of the language that they drafted.

The facts of Capital City are simple. Capital City Real Estate, LLC (“Capital City”) was a real estate company operating as the general contractor for the renovation of a building in Washington, D.C. The building was owned by 57 Bryant Street, NW LP and Bryant St., LLC (together “Bryant Street”). Capital City subcontracted work on the foundation, structural and underpinning work to Marquez Brick Work, Inc. (“Marquez”). The subcontract required Marquez to indemnify Capital City for damages caused by Marquez’s work and further required Marquez to obtain general liability insurance that named Capital City as an additional insured. Marquez duly obtained a general liability policy from Certain Underwriters at Lloyd’s, London (“the Underwriters”). The policy contained a standard additional insured endorsement that insured Capital City:

but only with respect to liability for … “property damage” … caused in whole or in part by:

  1. the Named Insured’s acts or omissions; or
  2. the acts or omissions of those acting on the Named Insured’s behalf

in the performance of the Named Insured’s ongoing operations for [Capital City].Continue Reading It Means What It Says: Federal Court of Appeals Rejects Insurer Attempt to Read Limitations Into Additional Insured Endorsement

Insurance requirements in commercial agreements and corresponding additional insured provisions in insurance policies are important tools to manage and transfer risks. However, far too often those efforts are thwarted by inattention and, in some cases, sloppiness. As exemplified by the disastrous outcome for the contracting parties in Cincinnati Insurance Company v. Vita Food Products, Inc., No. 13 C 05181 (E.D. Ill. January 30, 2015), there are many pitfalls to successfully transfer risk and secure additional insured coverage.
Continue Reading Harmonizing Risk Transfer: Avoiding Pitfalls With Additional Insured Provisions